The burden of tax is, once again, being transferred from the tax avoiding corporate community onto ordinary people.

What is clear is that this is unsustainable. Of course a modest GST could be imposed in Guernsey, but let’s be clear, the capacity to do so is limited, not least because the cost of living in the Channel Islands is already very high and at some point people in Jersey and Guernsey (and Cayman and elsewhere) will reject the option of being a tax haven when the pressure upon them for being so becomes to great.

Tax haven’s days are numbered.

I still think that is true. People will only suffer increasing tax charges for so long when they realise that they are paying so that others from elsewhere can evade and avoid their responsibilities using their jurisdiction as the excuse to let them do so.

It’s taking some time for the Crown Dependencies to cotton on that I was right, but increasingly that looks to be true. But I’m still seeing no real awareness of true understanding of the crisis they are in. That, I suspect, will now happen too late.

33 Responses to “Guernsey admits it is in the Black Hole I predicted in 2005. Jersey’s still in denial”

But surely if they did not have low tax rates to attract ‘offshore’ business, then it would make no difference to the amount of tax revenue available to build the infastructure required by the people who live there?

As you say yourself, the only reason all this economic activity is located there is the tax benefit. If that were taken away then the activity would not be there… and there’s still no money to pay for schools and roads. So doesn’t it *have* to be the people of the islands that cough up?

The NAO issues many reports. To say there is one in 2007 is vague. It is also the National Audit Office I believe you are referencing?

The constitutional documents that we hold and current practice disagree. Our legal and taxation systems are completely separate to your own. We have many royal charters attesting to this. As is current and historical practice. They are far more authoritative than an NAO report you do not identify. I would also refer you to custom law that we follow here as part of our Norman heritage. It would also prove we are constitutionally separate. We are independent. Whole islands of people know they are independent.The only evidence suggesting otherwise is your opinion and an unspecified NAO report. Neither of which are constitutional experts.

It is irresponsible to suggest if things go bad here we will look to the UK for a pay out which is not the case. You must take care with what you are saying. It is not true and quite damaging.

Dani, the islands are absolutely not independent. All it will take for you is 30 seconds on google to look up any document from the Ministry of Justice which has regularly outlined it’s relationship with the Channel Islands, including that it holds the ultimate responsibility for the rule of law and good governance and will intervene if necessary and that it has the right to intervene.

I’d also recommend the book by W.J. Heyting on the Constitutional relationship between Jersey and the UK (which I assume will be mostly the same as with Guernsey too). It’s a really interesting read and gives plenty of examples of UK legislation applying to the islands, including a couple of examples of Jersey courts actually directly applying a UK act of Parliament without an order in council from Jersey.

We may have our own legal systems and government, but so does Scotland…

I do believe we are related to the UK through our relationship to the queen.

The following quotes are from the Ministry of Justice

“The Ministry of Justice is the UK Government department responsible for the administration of the UK’s relationship with the Crown Dependencies – the Bailiwick of Jersey, the Bailiwick of Guernsey and the Isle of Man.”

Would this not purely be on behalf on the queen?

“Jersey, Guernsey and the Isle of Man are not part of the UK but are self-governing dependencies of the Crown. This means they have their own directly elected legislative assemblies, administrative, fiscal and legal systems and their own courts of law.”

“We provide the main channel of communication between the UK government and the three crown dependencies. We process legislation from Jersey, Guernsey and the Isle of Man for royal assent and we consult with the islands on extending UK legislation to them. We are also responsible for recommending crown appointments in the islands.” Crown appointments are HRM representatives in the islands.

“The Ministry of Justice examines legislation from the Crown Dependencies to ensure in particular that there is no conflict with international obligations or any fundamental constitutional principles. This enables the Lord Chancellor to advise The Privy Council whether Her Majesty in Council can be advised to make an Assenting Order, and thereby grant Royal Assent.”

“UK legislation does not normally extend to the Crown Dependencies. In instances where it does extend, it may do so either by virtue of the Act itself or by Order in Council made with the their agreement under an enabling provision contained in the Act which provides for it to be extended to the Crown Dependencies. For an Act to extend otherwise than by an Order in Council is now very unusual. Departments must consult the Crown Dependencies at the earliest opportunity in the event that extension is under consideration. It is to be noted that there are different formalities in each jurisdiction which must be observed before such an Order in Council can become effective, all of which
have the potential to impact on Bill timetables.”

“The Queen is the Head of State of each Island and the Lieutenant-Governor on each Island is Her Majesty’s personal representative. The Crown is ultimately responsible for their good government, the UK for their defence and international relations of each Island”

“The Crown Dependencies raise their own public revenue and do not receive subsidies from or pay contributions to the UK. They do, however, make annual voluntary contributions towards the costs of their defence and international representation by the UK.” See won’t be after your money

On the whole I believe we pick and choose the legislation the UK we want from the UK. This has been from my understanding that as we have such a close working relationship with them that it helps to adopt some of their legislation when it suits. I imagine it saves us lots of money from having laws redrafted from scratch.

I would have to investigate as to whether any legislation has been directly imposed in Guernsey before assuming a view either way. I would also have to look at if there was – why.

At least it will have the wonted side-effect of making the islanders more interested in democracy. When times were good, taxes were low, and the government was flush with money from finance, the populace didn’t really care and a very low percentage of them voted. It was the same in Jersey.

When the government’s only source of revenue is taxation from individuals, those individuals tend to take a greater interest in who gets elected, what their policies are, and how they implement them. Maybe Jersey and Guernsey will become more democratic as a result. In the past, there was a general apathy towards government which basically said, ‘We know they are all in it for themselves, but as long as we are doing okay as well, let them get on with it.’

[…] has published a statement on External Relations this morning. Whilst its near neighbour Guernsey begins to realise just how fragile its economy (like Jersey’s) is Jersey does instead decide its time to […]

We are democratic. Our system works for us. There is not a one size fits all policy. There are advantages to our government structure that reflect our islands uniqueness. How government is structured is reviewed and is currently being reviewed even now to make sure it is the best for us.

Yes our system does work. We elect people we wish to represent us which is the main criteria of a democracy. We have a system in place that we want. That is democracy in itself. As an island with a small population and different way of life it makes sense our system reflects those differences.

We discuss on a regular basis if it is the best system for us. People are very free to criticize, lobby and make their views known on matters effecting the island. This shows freedom and equality and that is the central features of a democracy. There is no actually prescribed definition but it is accepted these two features are the most important characteristics.

Yes it works, people in Guernsey are perfectly happy with how it works. I suggest Richard that you keep to subjects you know something about, like scaring gullible people in the UK into thinking that they have to pay taxes for the channel islands.

Dani, as Jerseyman I envy your system in Guernsey. Ours is still hundreds of years behind you because we still have 3 different types of members and our Constables are still in the States.

Your system of only Deputies each elected equally is something Jersey is considering swapping to at the moment.

However, your system still has the first past the post voting system (which is totally inadequate for getting accurate representation) and you don’t have political parties. You need parties so that the public can vote to endorse or reject a clear line of values and policies. With only independents you just have behind the scenes wrangling that no member of the public can influence.

The absence of parties – with, candidly, only one view presented to the electorate – continues to suggest that this is as close to an effective democracy as most states without any form of effective opposition

Sorry – but democracy has to allow for a change of government – when did that last happen in the Channel Islands?

I think you may be wrongly assuming that everything in Guernsey is like it is in Jersey, where your mate Geoff Southern clearly has no support. You appear to think that this because of Jersey’s system but it isn’t – it’s because he cannot attract support from the electorate. He can form a party and do more or less whatever he can to get elected (apart from committing voter fraud of course), yet he seems to get nowhere. That clearly suggests that he has insufficient supporters. What’s undemocratic about that?

In Guernsey a candidate can even choose to stand in a different district to enhance their chances of getting elected. In some districts there are are no more candidates than there are places, which means that all in that district would be elected and they then form 1/45th of the elected government (plus two from Alderney). Nobody is prevented from standing for election and political parties are not banned. Around 71% turn out at the polls (more than in the UK), which says it all.

Please do get your facts right. This is a system which has held Guernsey in good stead for decades. It works and is absolutely democratic. If its very different from what you would prefer to see in Jersey then take it up with Jersey. We are NOT the same as Jersey and far too many statements on your blog wrongly assume that we are. I think you are much closer to the situation in Jersey, where your contacts are clearly more extensive, and that you have erroneously convinced yourself that its exactly the same here. It most certainly is not, as any basic research would have told you.

I have not in any way “abused” Geoff Southern. I stated that he failed to get enough voter support (which is clearly true) and I made a reference to voter fraud (for which he was found guilty, correct?).

You ask when a change of government last occurred in the Channel Islands. Well – all 47 seats are up for grabs in the Bailiwick of Guernsey at each election every 4 years. In 2012 there were 22 newly elected deputies out of 47 – very nearly 50%. There could very easily have been more than 50%. There will only ever be a majority change of government if the voting population votes for such a majority change. It cannot happen without the voters wanting it – that’s democracy! To achieve it in any other way would clearly be undemocratic.

Nobody can be or end to go onto the electoral roll and nobody can force those who are on it to vote. What’s remotely undemocratic about that?

You seem to think that the Bailiwick of Guernsey has an elected government which is contrary to the wishes of the electorate, which is nonsense. The electorate can only elect those who are willing to stand in the first place, and everybody is entitled to stand. The sole improvement would be island wide voting.

Utter rubbish. It’s not a one party state – it’s a 47 party state, and 22 new “parties” just got elected. The electorate wanted change and they got change. If a circa 46% change in elected members isn’t a “change of government” then I don’t know what is.

If we had political parties in what way do you think the outcome would be different? Do you seriously believe that the majority of the population would like to see finance driven out?

So some criminal convictions don’t really count then? I would struggle to get that past my head of compliance. Or are you going to try to claim that he was framed by the Jersey legal system, just like Syvret?

@Dani “Yes a majority do vote. In our 2012 election there was a turn out of 71.4%.”

Firstly, that is an historical anomaly and proves my point – when there are real issues at stake, people will get out to vote. When the government derives most of its income from a source other than taxing the general population (oil revenue, finance, etc), the government doesn’t tax the people, in both senses and it leads to voter apathy. This has been true of both Guernsey and Jersey since the war, although Guernsey has seen a recent improvement.

Also, the figures you quote are only of those on the electoral roll in Guernsey, which is about 65% of the eligible voters:

“So instead we might see only about 60-70% of eligible island residents on the roll. Experience also tells us that the actual turnout is likely to be only about 60% of those registered. That means that of all those who are qualified to vote, only about 35-40% will actually do so on the day. And in some individual parishes, such as St Peter Port, the percentage is likely to be much lower.”

So you got a 70% turnout of 70% (at most) of eligible voters, which is not much over 50%, and that is your best year ever. Jersey sees turnouts of 40% and lower. My prediction is that as the finance industry dwindles as a source of government revenue and the government has to rely on general taxation, more people will realise that good government matters and affects them personally, and you will see greater democratic participation.

Recent trends in Guernsey have been upwards and I think that is a sign of that happening. In Jersey, the finance industry still exerts a pernicious influence on the government – in fact, you could say that the government now exists to service that industry – but that is going to change. Hopefully, Jersey will become more democratic as a result and more people will become actively involved in politics. You never know, things might get so bad that people actually get out on the streets and protest.

Isn’t the fact that the Guernsey government has not had rely on general taxation so far a sign of good government already? (unlike the UK i would like to point out, which is really the only reason we get referred to as a “tax haven” (which we aren’t)) If the UK dropped its tax rates to lower than the CI i will assume Richards’ backing in raising the tax rate back up in the UK as it would now be the “tax haven” you seek to go against.

I regret if you think being referred to as a tax haven has much to do with the tax rate your are seriously mistaken

Secrecy jurisdictions are places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain. That regulation is designed to undermine the legislation or regulation of another jurisdiction. To facilitate its use secrecy jurisdictions also create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so.

The article you have shown me only states there was concern of a low turnout where in fact there was a record turnout. The figure of which I provided above.

In the UK you must sign up for the electoral role and the figures I provided above were only UK turnout. Those that did not register were not included.

I would add that not voting is a choice allowed by being in a democracy. Everyone has a choice and is not forced to act in a manner they don’t wish to. It does appear voters have however increased in number and this is a good thing. It is what we want. The more voters the better! As long as there is not forcing

Richard

In Guernsey all citizens are equal before the law and have right to legislative processes. Every vote has equal weight, no unreasonable restrictions apply to anyone seeking to become a representative and the freedom of our eligible islanders is secured by legitimized and protected rights and liberties. This are deemed the important central features of a democracy. We are free.

There are many forms of democracy all around the world to suit different cultures. Having political parties is just another variation of democracy. Them not being present is not a sign of a lack of democracy.

Not having political parties is actually an advantage to us. As it has been said above anyone can talk with a deputy . They are open minded as to what you have to say. You provide evidence and facts to allow them to make decisions. They do not have a left or right view. They can simply act on what they think is the right thing to do which truly is wonderful. And as you it is said you can talk to them all and they will consider what you have to say. They have free choice on whether to act on it or not but the fact that your voice can make a difference and can change things just as one person is what democracy is all about!